The North American television market started to rouse from a long slumber during summer 2014, but for Toshiba the uptick just wasn’t enough. After its third year of dwindling returns in the HDTV market, Toshiba says it is pulling out of the television business in North America and elsewhere, more or less.
The Japan-based electronics maker said that beginning in March, any new HDTVs carrying the Toshiba brand in North America won’t be from Toshiba itself. Instead, Toshiba will license its name to Taiwan-based Compal Electronics for TVs in the U.S. and Canada. Toshiba says it will also license its brand name to other companies around the world—a strategy it hopes to complete by April. The one exception will be Japan, where development and sales will continue under the company’s guidance.
The story behind the story: Toshiba’s decision to become a brand licensee for televisions follows similar actions by competitors around the world. In October, Panasonic gave up on the U.S. market, handing over its Sanyo TV unit to Japan-based Funai Electric in return for annual royalties. Sharp licenses its brand in Europe to a Slovakia-based company, and Sony spun off its TV business last February into a separate entity.
Toshiba decided to exit active development and sales in North America due to a slowing global market and cut-throat price competition. It appears thin profit margins from lower prices may have been the bigger driver than the actual state of the TV set business.
Market research firm NPD DisplaySearch reported in late December that the TV market was finally beginning to pick up. After a sluggish 2013, DisplaySearch said worldwide shipments of LCD TVs grew in every quarter compared to the previous year.
North America also experienced strong than expected demand during the third quarter of 2014 (July-September) due to a replacement cycle of older flat panel TVs, DisplaySearch said.
Nevertheless, the TV market in North America wasn’t looking good for Toshiba, and the company decided to hand off its business to others.